LG Innotek and Samsung Electro-Mechanics are posting unusually strong results despite what is typically a seasonal lull for electronics parts makers, helped by an artificial intelligence-driven boost in demand. Steady smartphone camera-module sales and rising shipments of high-value semiconductor substrates used in AI data centers and servers are supporting growth.
LG Innotek said in a regulatory filing on 27 that its first-quarter consolidated revenue rose 11.1% from a year earlier to 5.5348 trillion won, the highest ever for a first quarter. Operating profit jumped 136% to 295.3 billion won, beating market expectations.
The first quarter is usually considered an off-season because the impact of new smartphone launches fades. This year, the company said demand stayed firm as popularity of the iPhone 17 series, released in September, carried into early 2026, lifting its core camera-module business. The optical solutions division, which accounts for about 80% of revenue, posted 4.6106 trillion won in sales, up 11.4% and a first-quarter record.
Growth was not limited to cameras. The package solutions division, which handles semiconductor substrates, reported revenue of 437.1 billion won, up 16% from a year earlier. The company cited surging demand for high-performance substrates such as flip chip ball grid array, or FC-BGA, as global big tech companies expanded AI investment.
It said higher-value communications substrates, including RF-SiP, performed strongly, and profitability improved as supplies of advanced substrates used in AI servers and accelerators increased.
Samsung Electro-Mechanics, which is set to report earnings on 30, is also expected to benefit from AI-related demand. According to a securities-industry consensus, the company’s first-quarter revenue is estimated at 3.2027 trillion won and operating profit at 295.0 billion won, up 16.7% and 47.1%, respectively, from a year earlier.
A key driver is multilayer ceramic capacitors, or MLCCs. The article said an AI server uses 10 to 15 times more MLCCs than a general-purpose server, and unit prices are several times higher, pushing MLCC production lines close to full utilization.
FC-BGA, which Samsung Electro-Mechanics has identified as a future growth area, is also expected to contribute more meaningfully as the AI accelerator market expands, accelerating a shift toward higher-value products. Industry watchers said the company could be on track to return to the “1 trillion won club” in annual operating profit starting from this first quarter.
An industry official said, “As the AI era takes hold, the seasonal swings in the electronic components industry are being offset,” adding that Korean parts makers, having secured mass-production capacity through early investment, are likely to maintain solid growth for the time being as key partners in the global AI supply chain.
* This article has been translated by AI.
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